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The Office of the Inspector General issued a favorable opinion regarding an affiliation between an Air Force medical group and a community hospital. The arrangement involves an Air Force medical group (medical group) located on a military base and a community hospital located near the base. As a result of hurricane Katrina, the medical group no longer has the patient population to maintain certain residency and training programs. The community hospital has a need for certain physician specialists. Under the proposed arrangement, certain specialists from the medical group would treat the hospital’s patients; these patients would include Medicare/Medicaid beneficiaries. The medical group specialists would utilize hospital equipment and facilities to treat patients and be covered under the hospitals malpractice insurance.

The specialists will only provide services if the hospital has an identified need for a particular specialists’ services. The hospital has determined that the costs associated with this arrangement would be offset by the expenses that would be incurred by bringing in a physician specialist from a different source. The services provided by the medical group specialists will be free to the patients. The hospital will bill the appropriate party for any technical fees that are appropriate given the services provided.

The OIG noted that the arrangement’s risk of violating the Anti-Kickback statute is low for the following reasons: the medical group physicians do not bill for their services; the hospital rarely serves as a referral source for the medical group; this arrangement is in the best interest of the public; the referrals are not required to be to medical group physicians; and the arrangement’s costs are offset by expenses avoided by utilizing the arrangement. The OIG stated that since federal healthcare program beneficiaries were not improperly influenced under the arrangement, civil monetary penalties would not be applicable. Specifically, the OIG looked to the following factors: there is no advertisement that the medical groups physicians services are free of charge; the hospital bills patients for technical fees; and the patients come to the hospital fully expecting to pay for the services and it is unlikely that learning the services are free after the fact will induce patients to solicit these services.

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The Department of Health and Human Services (HHS) has issued a notice of proposed rulemaking to modify the HIPAA Privacy Rule in accordance with the Health Information Technology for Economic and Clinical Health Act (HITECH) requirement that users of electronic health records (EHRs) provide a more extensive accounting of disclosures than previously required by the Privacy Rule. The proposed rule would give individuals the right to receive an access report showing them specifically who has accessed their electronic protected health information. While the Security Rule has arguably required such tracking pursuant to the audit trail requirements, it did not have to be shared with individuals. The proposed rule also requires more detail in accounting of certain disclosures, in an attempt to curtail existing efficiency problems.

Click here to view the complete HHS announcement. You can also click here to view the proposed rule. If you have any questions regarding compliance with the new HIPAA privacy standards or any other HIPAA issues, please contact a Wachler & Associates attorney at 248-544-0888.

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A sleep medicine and durable medical equipment company, Areté Sleep LLC, Areté Sleep Therapy LLC, and Areté Holdings LLC will pay a $650,000 settlement pursuant to federal authorities discovering the company to have submitted false claims to Medicare over a seven year span.

According to federal prosecutors, the false claims were for diagnostic tests performed by unlicensed/uncertified technicians. These licenses/certifications are required by Medicare rules and regulations. Areté filed for Chapter 11 bankruptcy in early 2011 and has agreed to pay the settlement with the proceeds from its asset sales.

If you have any questions or concerns regarding compliance with Medicare rules and regulations, or if you have questions regarding compliance issues associated with billing for sleep studies and related DME, please contact a Wachler and Associates attorney at 248-544-0888.

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ACO Start-Up Costs

According to a study conducted by the American Hospital Association, the costs associated with starting an accountable care organization (ACO) range from $5.3 million to $12 million. The study was based on a review of the start up costs of four ACOs currently in existence. Additionally, it was discovered that the yearly operating costs in connection with the ACOs were equal to the start up costs, if not more.

The study highlighted several costs that were associated with starting an ACO. One of these costs was incurred by hiring staff to coordinate the ACO’s activities, such as risk management professionals and workers hired to develop and manage a communication network between providers. Another start up cost incurred was that included in recruiting physicians, which ranged from $100,000 to $450,000 per physician. Next, the study found that ACOs spent nearly $3 million a year developing post-acute care networks (i.e. nursing homes, rehab services, and hospice care). Equally expensive were the costs associated with the implementation of EHRs, which cost up to $2.9 million along with an additional $2.5 million for starting up an HIE, plus annual operating costs.

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Over $365 Million in Improper Payments Identified By RACs Since October 2009

CMS recently reported that RACs have identified $312.2 million in overpayments from October 2009 through March 2011. During the same period, $52.6 million in underpayments were identified. While these figures are well below the over $1 billion in improper payments identified during the demonstration program, they are expected to increase. RACs are currently reviewing large numbers of DRGs in coding and medical necessity reviews and it is anticipated that these will result in identification of more improperly billed claims. The first quarter of 2011 accounted for $184.6 million in identified improper payments and these trends can be expected to continue for the foreseeable future.

CMS also released the top approved issue for each RAC region. The top issue for RAC Region A is Ventilator Support of 96+ hours; the top issue for RAC Region B is Extensive Operating Room Procedure Unrelated to Principal Diagnosis; the top issue for RAC Region C is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay; and the top issue for RAC Region D is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay.

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On May 16, the Office of the Inspector General for the Department of Health and Human Services released the report from its audit of physician therapy services provided during home health episodes. The report outlines the OIG’s findings that the Centers for Medicare and Medicaid Services (CMS) made duplicate payments for the same home health services. Specifically, the payments for the same services were made to the physician under Medicare Part B and then to the home health agency under the Medicare home health prospective payment system (HH PPS). The OIG recommended that CMS eliminate duplicate payments by adjusting the HH PPS rate to exclude physician-provided therapy services or by making physician therapy services subject to the consolidated billing requirement. CMS has agreed with the OIG’s recommendations and has indicated that it will take action to address the recommendation.

For more information on proper billing practices for home health services, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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As of April 20, 2011, a statement, writing, or action by a health care professional to an individual, or an individual’s family, that expresses sympathetic feelings towards that individual’s pain or death cannot be used against the professional in an action for medical malpractice. However, this bill does not apply to additional statements of fault or other culpable conduct. Click here to view the full version of the Act. If you have any questions or concerns about the legal effects of your actions, please contact a Wachler attorney at 248-544-0888.

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DCS Healthcare: The Region A RAC added three new medical necessity claims to its approved issues list. These claims are:

  • Peripheral/cranial nerve and other nervous system procedures with MCC (MS-DRG 040);
  • ECMO or tracheostomy with MV 96+ hrs or PDX except face, mouth and neck with major O.R. (MS-DRG 003);
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The Centers for Medicare and Medicaid issued a new rule that will make it easier for hospitals to use telemedicine when treating patients. The final rule, which takes effect sixty days following its publication, removes unnecessary burdens for hospitals and critical access hospitals (CAHs) to use telemedicine to serve patients in a timelier manner. These benefits will also reach rural hospitals and CAHs with limited access to primary care physicians and specialists.

Currently, any hospital or CAH that receives telemedicine services must undertake an extensive credentialing and privileging process for each physician or practitioner who will provide the telemedicine services to the patients. CMS concluded that its current requirements were often duplicative and unnecessarily burdensome, particularly for small hospitals and CAHs. It recognized that small hospitals and CAHs do not have access to a medical staff with the requisite clinical expertise to evaluate and privilege the various specialty physicians that could provide the hospital with telemedicine services. However, through the final rule, CMS will now permit hospitals and CAHs to implement a streamlined credentialing and privileging process for these telemedicine providers. Specifically, a hospital or CAH that provides telemedicine services to patients through an agreement with another hospital or telemedicine entity may rely on the information from that other entity when making credentialing and privileging decisions about the providers at the other site who will supply the medical services through telemedicine.

For any questions regarding compliance issues related to telemedicine services, please contact a Wachler & Associates attorney at 248-544-0888.

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Over $30 billion has been set aside by the government to use for incentive payments in an effort to get health care professionals to switch to electronic records. One reason for the push towards electronic records is the ability exchange patient information between systems. As a way to efficiently capture this benefit, government-funded regional health information organizations (RHIOs) were established. These organizations sign up doctors and hospitals in a specific area and coordinate the transfer of electronic patient records between health care providers. However, a recent survey published in Annals of Internal Medicine shows that RHIOs’ future looks to be uncertain as their financial viability appears to be a cause for concern.

The study surveyed 197 RHIOs, of which 165 returned the surveys. It was shown that only 75 of the RHIOs were currently operational, covering a mere 14% of hospitals and 3% of ambulatory practices in the United States. Moreover, only 13 of those RHIOs are able to conduct the necessary exchange of information that enable doctors to partake in receiving payments of the $30 billion that the government set aside in an effort to promote the electronic switch. Finally, only 67% of the currently operational RHIOs were found to be financially viable. The results of this study creates a concern of whether RHIOs can indeed be effective in assisting hospitals and physicians with the type of electronic information sharing that was intended to advance the quality of care for patients.

If you need help understanding the meaningful use requirements or assistance with negotiating EHR contracts, please contact a Wachler and Associates attorney at 248-544-0888.

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